PSE&G shows corporate America can look long term

So here we are, digesting the payroll tax increase that went into effect in January; digging deeper to pay for the annual spike in gasoline prices; and back on the Washington-is-dysfunctional story, awaiting federal budget cuts that the Wells Fargo economic team thinks could shave .3 percentage points off the economy this year.

There remains a lot to be nervous about. But I’ve come across two signs that have me kind of hopeful that we’re actually in a new age in Corporate America.

It’s an age that could be much different than the post-tech-bubble decade, when companies showered their executives with money, stopped investing in the future, fought any proposed changes tooth and nail and turned the middle class into a rumor.

It saw companies manage for quarterly earnings and day traders, going so far that they almost managed themselves right out of business. And so we at In The Money are going to try something new: positive reinforcement.

*PSE&G said it would invest $3.9 billion over the next 10 years to fortify its electric and natural gas system against the increasingly violent storms. The company said its plan would create 5,800 direct and indirect jobs. Customers’ bills would remain stable. And the project would save money in the long-term, leaving it with fewer outages.

Did Wall Street punish the company? No. Its stock is up 5.1 percent since the beginning of the year (less than two months). And Moody’s yesterday said the move would improve its credit standing in the future.

*Not long after that announcement, I headed to Six Flags Great Adventure, where I talked to the park’s president, John Fitzgerald. Now, Six Flags Entertainment doesn’t share information about local parks, so I can’t prove this. But Fitzgerald said the park last year recorded its highest customer satisfaction ratings at least since its parent company came out of bankruptcy three years ago.

He said the Six Flags management team in Texas has been serious about investing in their parks, going so far as to significantly increase wages for their employees to attract better – and happier – talent. Seriously, who wants to go to an amusement park that has disgruntled employees?

Six Flags gets serious demerits at In The Money for spending millions of dollars buying back shares of stock. We would rather see that money go toward improving the park, increasing wages, adding employees, buying technology, increasing dividends. Anything but buying back stock. (It reduces the number of shares, gives a quick boost to earnings-per-share, and presumably jolts the stock price…but only temporarily.)

But Wall Street is applauding. The company’s stock is up almost 270 percent since 2010, or 90 percent a year.

I’ll turn it over to you. Have you noticed a difference at Six Flags Great Adventure? How does it compare to five or 10 years ago?

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About Michael Diamond

Michael L. Diamond is a business writer at the Asbury Park Press, covering workforce and the economy. He worked at newspapers in Pennsylvania and California before joining the Press in 1999.

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Michael DiamondMichael L. Diamond is a business writer at the Asbury Park Press, covering workforce and the economy. He worked at newspapers in Pennsylvania and California before joining the Press in 1999.E-mail Michael